Unlikely Alliances in Congress Struggle to Enact Stock Ban

A bipartisan coalition is emerging in the United States Senate to revive efforts to ban members of Congress from trading stocks, reigniting a years-long effort that has begun to gain ground with members of both parties.

On Friday, Beltway tipsheet Punchbowl News wrote in its morning newsletter that Democratic Senators Elizabeth Warren and Raphael Warnock had begun working alongside Republican colleagues Josh Hawley and Lindsey Graham to build a coalition of senators willing to advance a stock trading ban closely resembling a proposal Warren spearheaded with Montana Democrat Steve Daines last session.

That legislation—which attracted support from Republicans like Tennessee’s Marsha Blackburn—sought an explicit ban on members and their spouses from owning stocks or “other potentially problematic investments” that could be influenced by their positions in Congress in a move Warren said would help “root out corruption in Washington.”

“Banning insider trading by Members of Congress is a critical step to restoring public confidence in our institutions and ensuring the interests of the American people come before personal financial gain,” Montana Republican Matt Rosendale, who co-sponsored a companion bill in the House with Washington Democrat Pramila Jayapal, said in a statement at the time.

Bipartisan support, however, hasn’t necessarily meant the support of the rest of Congress.

Despite having majorities in both chambers and a Democratic president in 2022, Warren’s legislation never made it past the hearing stage in the previous Congress. And while a version of the House legislation has already been reintroduced this term, little movement has so far been seen in the Senate.

That’s not to say some members aren’t trying. In January, Hawley introduced legislation called the Pelosi Act—or the Preventing Elected Leaders from Owning Securities and Investments Act—in an effort to curtail stock trading by his congressional colleagues.

In April, a group of nearly two dozen Democratic senators led by Oregon’s Jeff Merkley and Ohio’s Sherrod Brown introduced legislation called the Ending Trading and Holdings in Congressional Stocks, or ETHICS, Act, which like Warren’s previous proposal would “prohibit members of Congress, their spouses and dependent children from abusing their positions for personal financial gain by owning or trading securities, commodities, or futures.”

While the largest, most comprehensive effort to date, that bill notably lacked the Republican support of similar proposals, though Merkley said in interviews he was working to get others—including Graham—to support it. Newsweek reached out to Graham’s office for comment.

“This is a product of intense conversations throughout our caucus and with everyone in the caucus who produced a bill last time, and of conversations with a whole bunch of Republicans that we strived to work with,” Merkley told CNN in April. “Senator Elizabeth Warren had conversations with Senator Lindsey Graham and Senator Steve Daines of Montana.”

At this point, it’s unclear how, or even if, Merkley’s proposal is different than the one being considered by the bipartisan group Punchbowl reported on Friday.

It’s also unclear whether the coalition has the votes to pass it, leaving it up in the air whether Senate Majority Leader Chuck Schumer—who previously supported a vote on a stock trading ban ahead of the 2022 midterm elections—would ultimately entertain it for a vote. Newsweek reached out to Schumer’s office for comment.

The public appetite for a ban on congressional stock trading is high even among members of Congress, particularly given the increased level of scrutiny on the transactions made by federal lawmakers around key votes and major market events. Recent polling shows roughly 70 percent of voters across the political spectrum support banning members of Congress from holding individual stocks, largely due to recent events.

Last year, numerous news outlets wrote stories detailing the high-dollar stock trades of then-House Speaker Nancy Pelosi’s husband, Paul, as she actively pushed back against—if not completely undermined, as some colleagues alleged—the idea of implementing a ban on congressional stock trading.

“We are a free-market economy,” Pelosi said at the time. “They should be able to participate in that.”

Others, like popular investing account Unusual Whales, have sought to draw attention to what it called “unusual” trading activities by figures like California Democrat Dianne Feinstein, whose net worth ballooned by millions during her time in the U.S. Senate.

More recently, several members of Congress garnered controversy for selling tens of thousands of dollars in bank stocks in the days preceding widespread failures in the U.S. financial sector.

According to an investigative report by the New York Times in 2022, nearly one-fifth of federal lawmakers or their family members had bought or sold financial assets over a three-year period that could have potentially been affected by their work as lawmakers.